Teacher's Pension Plan

Contributions

All teachers contribute whether they teach for a year, a month or a day. The contributions are calculated as follows:

To the TPP:
11.3% of amount up to $55,300 per annum.
12.9% of amount of salary in excess of $55,300 per annum.

To the CPP:
4.95% of the amount of salary between $3,500 and $55,300 per annum.

This is the 2017 amount of the Year's Maximum Pensionable Earnings as prescribed by the Canada Pension Act. It is adjusted yearly according to the changes in the Average Industrial Wage in Canada.

Deductions

Contributions are deducted from each salary cheque. For teachers earning over $55,300 some monthly deductions will be larger than others. This is because the 4.95% contribution to the CPP is taken from the total monthly salary and accumulates each month until the maximum of $2,564.10 has been deducted. Once this amount of $2,564.10 has been deducted no further CPP deductions will be made.

Refunds

As of January 1, 1988, teachers who leave teaching but do not retire, and who have been contributors to the Teachers' Pension Plan (TPP) for at least two years may not withdraw contributions in respect of service since January, 1988. Provincial laws require locking in of such contributions. The options available to the teacher are:

Leave contributions in the fund to receive a deferred pension.

Transfer the commuted value of the deferred pension to another pension plan if the other plan accepts.

Transfer commuted value to a locked-in RRSP.

Teachers with less than two years' service who leave teaching will be eligible for a cash refund.

Retired teachers, in receipt of a NS Teachers' Pension, who substitute or hold a term position will not make contributions to the Teachers' Pension Plan. If contributions are inadvertently deducted by the employer, the retired teacher should contact the school board for which he or she worked to arrange for a refund. A reminder that if you are in receipt of a NS Teachers' Pension, you can work up to 69.5 days each school year without impact to your pension payments.

Under the CPP no contributions are refundable. However, there is provision for a return of any overpayment made by the teacher. There is provision on the annual income tax form to claim tax credit and/or a refund of such overpayments.

Indexing

Teachers retiring after August 1, 2006 will have indexing based on the funded level of the pension plan. If the funded level is below 90%, then there will be no indexing. If it is between 90% and 100%, the Trustees may pay 50% of CPI (Consumer Price Index). If it is above 100% funded, then full indexing will be paid unless it brings the funded level below 100%. No less than 50% of CPI will be paid at any time the fund is over 100%. The Trustees will pay an amount between 50% and full CPI as long as the fund does not go below 100%.

Teachers retired prior to August 1, 2006 remain with CPI -1% unless they elected the new rules by July 31, 2006.

A Full Service Pension does not necessarily mean a maximum 70% pension.

Full Service Pension means 2% for each year of teaching service to a maximum of 35 years with no reduction.

Maximum Service Pension is 70% and can only be obtained with 35 or more years of service.

A Service Pension is a right. A disability pension is at the determination of the Nova Scotia Pension Services Corporation based on medical evidence.

Part-Time Employment - Full-Time Service

For the school year 2017-2018, teachers may elect to work part-time and make pension contributions to earn pension service equal to that earned in the previous school year. The maximum period that a teacher may participate in this arrangement is a total of two years in a lifetime. The teacher must work less days and earn less money than in the year prior to entering this arrangement. The agreement to work less time must be arranged between the teacher and the employer. The teacher must also work for a minimum of 40%.

Pensions Based on Commuted Value

It is possible for teachers age 55 to 59 who have from two to 19 years of service to receive a pension based on commuted value. Some of the service must have occurred since January 1989. The actual amount of pension will vary depending on the teacher's salary and certain actuarial assumptions such as rate of inflation and rate of investment return. Further details are available from the Nova Scotia Pension Services Corporation.

Refund Payments (TPP Only)

When a teacher who has taught less than two years dies, the amount of his/her payments to the TPP shall be paid to the surviving spouse. If no spouse, to the children, then to the dependants of the teachers, if no dependants, then to the estate.

Details

Further information on the Canada Pension Plan is available from your local Social Development Canada office, by calling 1-800-277-9914, or visiting their website.

Retiring teachers please check the following for additional information:

The Teachers' Pension Plan and Retirement Tips, a handbook containing information on pension, retirement service awards, group insurance benefits, Employment Insurance benefits and the Retired Teachers Organization is available for download (click here) or on request through NSTU Central Office 902-477-5621 or toll-free 1-800-565-6788.